Senate HELP Committee Asks DOL to Focus on 6 SECURE 2.0 Provisions

The leaders of the Senate Committee on Health, Education, Labor and Pensions issued a letter this week urging the Department of Labor to prioritize implementation of certain provisions in the SECURE 2.0 Act of 2022, including those regarding employer ownership, defined benefit annual funding notices and emergency savings.

“We hope DOL will effectively and expeditiously implement the SECURE 2.0 Act—just as DOL has done and continues to do with a slew of bipartisan retirement reforms passed in 2019,” the committee wrote in the letter. “While full implementation of the SECURE 2.0 Act is the ultimate goal, we urge DOL to prioritize administration of the following provisions.”

The HELP committee, led by Senator Bernie Sanders, I-Vermont, as chair, and Senator Bill Cassidy, R-Louisiana, as the ranking member, went on to urge the DOL, currently run by Acting Secretary Julie Su, to prioritize six provisions. Su told the committee in April that the DOL would provide additional guidance on SECURE 2.0 in a “timely manner.”

The committee’s focus areas included Section 346, which establishes an Employee Ownership Initiative within the DOL, authorizing a $50 million grant program to promote employee ownership of businesses. The DOL would also need to issue formal guidance on employee stock ownership plan valuation standards, according to SECURE 2.0. The next area of focus was Section 343, which requires administrators of all defined benefit plans that are subject to ERISA to provide an annual funding notice to the Pension Benefit Guaranty Corporation. The notice must also alert participants in single-employer plans that if plan assets are sufficient to pay vested benefits not guaranteed by the Pension Benefit Guaranty Corporation, participants and beneficiaries may receive benefits in excess of the guaranteed amount, which generally uses assumptions that result in a plan having a lower funded status compared to the disclosed funded status.

The third area on which the letter focused was Section 127, which allows employers to offer pension-linked emergency savings accounts to their non-highly-compensated employees. Employers can automatically opt employees into these accounts at no more than three percent of their salary, and the portion of an account attributable to the employee’s contribution is capped at $2,500, or lower as set by the employer.

Additional areas of attention included Section 347, which directs the DOL to study the impact of inflation on retirement savings and submit a report to Congress on the findings of the study. Section 321 requires the DOL to review the current interpretive bulletin governing pension risk transfers, then determine whether amendments are warranted. Finally, Section 341 directs the Department of the Treasury and the DOL to consolidate defined contribution plan notices into a single notice.

“Many of these provisions also require the Department of Labor  to engage in rulemaking and issue further guidance and reports under prescribed deadlines,” the letter stated.

The Insured Retirement Institute, an industry association in support of SECURE 2.0 legislation, wrote in support of the HELP committee’s letter.

“Implementing required regulations is essential to deliver the substantial benefits the Secure 2.0 Act provides,” Paul Richman, the chief government and political affairs officer of the Insured Retirement Institute, said in a statement. “The emergency savings rule was an IRI-advocated provision that can aid under-saved workers and retirees. … We also believe a study on the effects of inflation on retirement savings will yield important insights to help craft additional bipartisan public policy solutions to help ensure retirees do not outlive their retirement savings.”

The HELP committee has advanced Su’s nomination as Secretary of Labor, but a Senate vote to confirm her is still pending passage amid Republican opposition.

The HELP committee push comes after a May 24 open letter from congressional leaders to Secretary of the Treasury Janet Yellen and IRS Commissioner Daniel Werfel clarifying what Congress intended with certain provisions of the SECURE 2.0 Act of 2022. In the letter, a bipartisan group of Senate and House members said they intend to correct some technical errors but did not spell out a timetable.